Melbourne-based iSignthis is fast earning a global reputation for enhancing online payment security, helping obligated entities meet anti-money laundering regulations effectively.
iSignthis is capturing the attention of financial institutions around the world with its game-changing Paydentity technology, which converges real-time online identity verification with authenticated remote payments.
The online identification and payment authentication provider recently secured an eMoney institution (EMI) licence in Europe, marking a significant milestone for the business. With its unique technology that works to protect both online customers and merchants from fraud and identity theft, this achievement is seeing the business rise up the ranks on a global scale.
The licence allows iSignthis—which has already partnered with the National Australia Bank for card acquiring services in Australia and New Zealand—to offer merchants in the European Union the full range of its Paydentity solutions.
It also grants the company—which will trade in Europe under the name ISXPay—to execute a range of payment transactions. The solution further enables iSignthis to acquire payment instruments, such as credit or debit cards—amongst other services.
Importantly, it also allows financial institutions—such as banks, credit unions, and gaming businesses in the EU and Australia—to meet increasingly stringent anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
The success of iSignthis is another example of the strength of Victoria’s fast-growing fintech sector, with the Melbourne-based business “filing a gap” that European regulators and merchants had long been searching for.
iSignthis Managing Director and Chief Executive Officer John Karantzis says the global appetite for its technology is being driven by the fact it brings a number of verification and authentication processes together for the very first time.
“In a nutshell,” he says, “all businesses in the AML/CTF-regulated sector have a requirement to do three things.
“They need to know who their customer is, which is known in the industry as ‘Know Your Customer’ or ‘KYC’; they need to understand their transaction flows, ie. where is the money coming from and where is it going; and they need to be able to monitor for unusual or suspicious behaviour.”
He says typically that process is done by three different vendors, completely independent of each other.
“What we do, as a company out of Melbourne, is we bring all of those three things together for the first time anywhere in the world.”
The beginning of an idea
While iSignthis listed on the Australian Stock Exchange (ASX) in March 2015, the idea for the business started several years before, when Karantzis—a qualified attorney and engineer—was helping his wife stamp out fraud on her online store.
“She was suffering online fraud and she needed to find out who her customers were, whether they were legitimate and whether they had the right to use the cards they were using,” he explains.
“In solving her problem, I realised that I’d actually solved a bigger problem and was able to take what I learned about fraud on a small domestic website and expand that out into the context of international money laundering,” he explains.
Mr Karantzis founded the company in 2011 using his own funds. He then set about applying for patents for his unique method of verifying online transactions in a number of jurisdictions, including Australia, New Zealand, Europe, the US, South Africa and Singapore.
He says the ASX listing in 2015 was another important milestone for the business.
“For an AML (anti-money laundering) business to do business with another business like ourselves, that business needs to be either listed, AML regulated or the subject of extensive due diligence. So the quickest way for us to enter the market was to be listed ourselves.”
But he says gaining an eMoney institution (EMI) licence in Europe, from the Central Bank of Cyprus, has been the most significant milestone to date.
“I think the integration of cross EU and Australian New Zealand banking services, whereby we can now offer the identity verification and transaction monitoring but also the payments clearing and settlement… means we can actually be a one-stop shop in terms of the transactional banking as well as being a compliance platform,” he says.
From Melbourne to Cyprus
iSignthis now employs a team of 30, split between offices in Melbourne and Cyprus. This team is made up in equal parts of technical staff, sales staff, legal professionals and management.
Karantzis says Melbourne is the perfect headquarters for the business, which is increasingly focused on the gaming and trading sectors. Its office in Cyprus allows it to service clients 24/7.
“The gaming and trading sectors really start in the Isle of Man, and go through to the UK, Gibralta, Malta, Cyprus, and into Melbourne and Sydney. So you’ve got this string of businesses that operate across those jurisdictions,” he says.
“Between our offices in Melbourne and in Cyprus, which are 9 to 10 hours apart, we feel that we can really service our clients around the clock anywhere in the world.”